Is business travel going green?

With companies more conscious than ever of their corporate social responsibility, Catherine Chetwynd looks at how many are forcing a rethink on the ways they conduct overseas business

There is increasing pressure for businesses to take account of their carbon footprint, but for many businesses, cutting out travel is out of the question. Erik Kudlak, managing director Europe for real estate broker Molinaro Koger, is a good example. ‘I do think a lot of meetings could be done through quality video conferencing and I can have a good relationship with someone over the telephone. But I will never get them to sign on the dotted line until I get face-to-face. The personal touch is so important.’

This is not to suggest that businesses should simply carry on travelling regardless. IG Management specialises in advising companies on responsible business travel, and managing director, Bernard Harrop, takes a pragmatic approach. ‘You have to be realistic,’ he says. ‘Many companies’ shareholders would not thank them for stopping travel, but stakeholders want organisations to become more environmentally friendly.

‘And there are good reasons why companies should support the environmental approach: organisations can change their business model to be environmentally friendly and to grow the business,’ he says.

Harrop says there are three options: companies can reduce emissions by cutting out elements of travel; they can travel smarter; and they can offset emissions. ‘They could aim to do 10% of their meetings on video conferencing or send four people to a meeting instead of five. They could reduce travel by 1% or 20%, reducing emissions per person; that is what I mean by travelling smarter.

‘It should be part of the company culture and that will be achieved by communication and engaging staff, it cannot be done in a year,’ says Harrop.

Many travel management companies (TMCs) have produced carbon calculators and, according to consultant for HRG Ian Flint, there is a number of ways of using them.

‘Many clients have carbon calculations built into their reporting and some are looking at how calculators can interface with booking tools to give an alternative means of travel,’ he says. ‘If someone is booking a flight from London to Paris, our calculator will show the emissions for the flight, for travel on Eurostar and by car. If there is one person in the car, the emissions per head are higher than travel by rail, but if there are four people in it, emissions are lower.’ Realistically, however, rail is only an option in the UK and the rest of Europe, not in Asia or the US.

But as Flint points out, the environment is not the only factor. ‘On a domestic route, you can get from A to B in a day by rail, but if you drive, will you still do it in a day and what state will you be in?

‘We are renegotiating supplier contracts using an environmental service indicator, looking at airlines’ older aircraft and hybrid rental cars – it is a major analytical tool,’ says Flint. But there are risks here, too. ‘We don’t know which aircraft will be on a route at a given time, which might result in our advising against an airline when they are sometimes using new aircraft.’ One American carrier uses Boeing 777s and 767s between London and Chicago. ‘You save 15% on emissions by travelling on the 777, which has different engines and a different seat configuration,’ says Harrop.

Balance

Despite the measured view produced by consultants such as Flint and Harrop, corporate reactions seem to span the barometer. One company recently cancelled its contract with an all-business class carrier because emissions per head were so high; another encourages travellers to question the necessity of the trip, while business class is standard for all travelling employees as a matter of quality over quantity. Work/life balance and duty of care also play an important part here.

‘A balance has to be struck and I am concerned that balance is too often overlooked,’ says Graham Ramsey, CEO of travel management company ATP. ‘It makes no sense to assume that just because something is perceived to be eco-friendly, it is by definition the most sensible choice. It is not. And putting things right afterwards may well turn out to be more environmentally expensive than it would have been to take the trip in the first place.’

On 6 July, PwC issued a personal target to all travellers to reduce their carbon footprint by 20%. ‘This does not mean they should not travel – working with clients is paramount to our business,’ says Mark Avery, head of business services. ‘We analysed the volume of travel done for internal business, as opposed to client facing, and have given 20%. It is a tough target, but there is no point in doing it if it is not stretching.

‘We are issuing a league table for different parts of the business and we provide measurement via an online tool that demonstrates the difference between air and rail. We do a lot of domestic sectors, plus London to Paris, where it is not unreasonable to go by rail. We are doing a big marketing and publicity campaign around different forms of transport.’ And most important: ‘The board has signed up to it.’

Video conferencing

Although video conferencing is no substitute for face-to-face, it is certainly a viable option to some meetings. PwC has video conferencing facilities at 15 of its UK offices and Avery is setting up facilities at another eight locations. He calculates that PwC could make potential savings of 700 tonnes of CO2 emissions. ‘But that is domestic only,’ he says. ‘Internationally, we are looking to save 3,000.’

Even the bodies concerned with the environment are not suggesting a total ban on travel. ‘Our first step is to do an assessment of a company’s carbon footprint, taking in everything they do – use of water and energy, business travel, commuter travel – and we map that through an independent group of scientists,’ says spokeswoman Sarah Brown.

‘Then we help them set a target, preferably a stretching target. They meet that by reducing their reliance on air travel, on vehicles for personal and business use, and on fleet cars, looking at hybrids,’ she says. ‘They can also balance external emissions by investing outside the UK in renewable technologies that require carbon finance to get established.

‘We are not saying “never get on a plane again”, some travel is essential, but it is about analysing company behaviour. Companies probably do not have to do as many meetings face-to-face as they think,’ she says. Some want to take action in advance of forthcoming legislation, others are doing it for business and ethical reasons.

‘Companies also want to show leadership in their market, and environmental issues have an impact on retaining and recruiting staff, particularly graduates. Young people are very keen on the issue,’ says Brown.

The last word goes to Ramsey: ‘Common sense dictates that travel should go green. It does not dictate that it should go altogether.’

Carbon offsetting

Carbon offsetting is charged per tonne (1,000kg) of carbon, according to the type of offset (forestry, solar, hydro), small or large scale project (small tends to be more expensive) and volume bought. There is a market price (there are many people selling offsetting and that sets a price) but it is also built around contributory costs, i.e. the cost of setting up a project; monitoring it to ensure it delivers the promised offset; legal factors (e.g. contracts); and registering projects in the public domain so that anyone can find out more about them.

According to a survey by travel consultancy Advito, 50% of its global client base had a corporate social responsibility (CSR) policy and, of those, only 20% had travel management built into their CSR. In Europe, 60% had a CSR policy, with travel included in 40%; and in the US, the proportions were 50%: 20%.

Catherine Chetwynd is a freelance journalist specialising in business travel, conference, incentive and exhibition writing. She also writes for The Times and the Financial Times.